While many desktop surfers don’t care for them, the presence of advertisements on the wired Internet was virtually assured even before the Internet’s widespread use-marketers saw that advertisements fit almost as perfectly in the medium as they do on television-and now there seem to be as many advertisements as there are Web sites. However, advertising on wireless devices doesn’t create such a perfect fit, and many are beginning to wonder how it will ever get off the ground-or if it ever will.
So far, carriers have been unwilling to upset their customers by opening up the network to mass advertising. It’s pretty much understood that no one wants to answer his or her phone expecting a friend, only to find out it’s a call about Disney’s next animated family movie. And while location-based advertising may come to play a bigger role when the technology is stabilized, it too faces the same problem of upsetting customers.
In its latest report on the possibilities for wireless advertising, research firm Jupiter Research, a Jupiter Media Metrix company, cautioned that even by 2005 the wireless advertising industry would raise only about $700 million, compared with the more than $16 billion the company believes wired Internet advertising will generate. The reasons wireless advertising won’t take off in the next several years, according to Jupiter Research, are lack of standards, audience fragmentation and an unclear return on investments, even though marketers likely will be able to reach customers closer to where and when they plan to purchase.
Well, Rachel Barenbaum says nuts to that.
“We’re creating a new kind of advertising,” she said.
Barenbaum is the president and founder of PlanetHopper Inc., which just finished its beta trials in January. PlanetHopper is working to move the focus away from the carrier and onto the customer, letting the customer decide what ads should be sent and how.
“We’re giving people what they want,” Barenbaum said.
The most recent numbers show that PlanetHopper is giving about 2,000 people what they want, and is actually making money in the process, she said.
PlanetHopper’s advertising model allows wired Internet surfers to chose whether they want to receive wireless advertisements, and what types of advertisements they want. For example, a movie fan visits the Web site for General Cinema Theatres-one of PlanetHopper’s biggest customers-and signs up to receive wireless movie advertisements. Now, General Cinema can send that user specific and targeted coupons, what PlanetHopper calls Digital Deals, which would discount a movie pass on a certain day. Through PlanetHopper, businesses can have complete control over the advertisements they send out, and customers can have control over the advertisements they receive.
PlanetHopper started its beta service in June in the company’s hometown of New York City. There, the Internet site for Shecky’s Bar Club and Lounge Guide featured the company’s service, offering wireless coupons for more than 200 bars and restaurants. Other companies and cities were soon added.
Barenbaum said the setup gives customers exactly the type of advertisements they want to receive.
“They want to see an advertisement for a restaurant down the street,” she said. “If you have a local edge, that makes all the difference.”
Now out of beta testing, PlanetHopper said it is finishing deals with record label Atlantic Records, baseballers Tampa Bay Devil Rays and film studio New Line Cinema.
Mike McGuire, an analyst with the Gartner Group, said PlanetHopper meets a fundamental requirement for wireless advertising: The customer is king.
“The end user has to have control and be able to opt in,” he said. “They (PlanetHopper) have a pretty solid grasp of the idea.”
But McGuire said he wonders whether the company will continue to grow after its debut. There may just not be enough need for a company like PlanetHopper, he said.
“I think it’s going to be interesting to see how they grow the business,” he said.
One study, from researchers at Telephia Inc., found that there may be more of a market for wireless advertisements than some believe. According to the study, more than 50 percent of respondents were at least somewhat enthusiastic about receiving wireless advertisements. In addition, of those who didn’t want to receive wireless ads, 19 percent changed their minds when offered discounts on products and services.
These results come in contrast to Jupiter Research’s study, which found that there may not be a large market of surfers looking to opt in. According to its results, almost half of all wireless users said no form of compensation would persuade them to receive advertising on their mobile devices. However, analysts with the research firm contend that users would likely be more interested in advertisements that are location and time sensitive.
Barenbaum said PlanetHopper’s service really wasn’t designed for location-based advertising.
“Our plans are really to let the consumer tell us where they are,” she said. “I think it’s more important to know where someone wants to be, rather than where they are.”
However, Barenbaum said PlanetHopper is still open to the idea, once the technology catches on.
“In the future we can certainly do location-based deals,” she said. “I certainly see it in our future.”
While carriers seem to be against it, and some studies show the industry may go nowhere, Barenbaum is optimistic about the possibilities of wireless advertising and PlanetHopper’s place in it.
“I think this is going to be the future of advertising on wireless devices,” Barenbaum said.
